Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 2.6 percent in the fourth quarter of 2013
(that is, from the third quarter to the fourth quarter), according to the "third" estimate released by the
Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.
The GDP estimate released today is based on more complete source data than were available for
the "second" estimate issued last month. In the second estimate, the increase in real GDP was 2.4
percent. With this third estimate for the fourth quarter, the general picture of economic growth remains
largely the same; personal consumption expenditures (PCE) was larger than previously estimated, while
private investment in inventories and in intellectual property products were smaller than previously
estimated (see "Revisions" on page 3).
The increase in real GDP in the fourth quarter primarily reflected positive contributions from
PCE, exports, and nonresidential fixed investment that were partly offset by negative contributions from
federal government spending and residential fixed investment. Imports, which are a subtraction in the
calculation of GDP, increased.
The deceleration in real GDP growth in the fourth quarter reflected a downturn in private
inventory investment, a larger decrease in federal government spending, a downturn in residential fixed
investment, and a deceleration in state and local government spending that were partly offset by
accelerations in PCE and in exports, a deceleration in imports, and an acceleration in nonresidential
fixed investment.
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FOOTNOTE. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent
changes are calculated from unrounded data and are annualized. "Real" estimates are in chained (2009)
dollars. Price indexes are chain-type measures.
This news release is available on BEA’s Web site (www.bea.gov) along with the Technical Note
and Highlights related to this release. For
information on revisions, see "Revisions to GDP, GDI, and Their Major Components".
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The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.5 percent in the fourth quarter, the same increase as in the second estimate; this index
increased 1.8 percent in the third quarter. Excluding food and energy prices, the price index for gross
domestic purchases increased 1.8 percent in the fourth quarter, compared with an increase of 1.5 percent
in the third.
Real personal consumption expenditures increased 3.3 percent in the fourth quarter, compared
with an increase of 2.0 percent in the third. Durable goods increased 2.8 percent, compared with an
increase of 7.9 percent. Nondurable goods increased 2.9 percent, the same increase as in the third
quarter. Services increased 3.5 percent in the fourth quarter, compared with an increase of 0.7 percent in
the third.
Real nonresidential fixed investment increased 5.7 percent in the fourth quarter, compared with
an increase of 4.8 percent in the third. Nonresidential structures decreased 1.8 percent, in contrast to an
increase of 13.4 percent. Equipment increased 10.9 percent, compared with an increase of 0.2 percent.
Intellectual property products increased 4.0 percent, compared with an increase of 5.8 percent. Real
residential fixed investment decreased 7.9 percent, in contrast to an increase of 10.3 percent.
Real exports of goods and services increased 9.5 percent in the fourth quarter, compared with an
increase of 3.9 percent in the third. Real imports of goods and services increased 1.5 percent, compared
with an increase of 2.4 percent.
Real federal government consumption expenditures and gross investment decreased 12.8 percent
in the fourth quarter, compared with a decrease of 1.5 percent in the third. National defense decreased
14.4 percent, compared with a decrease of 0.5 percent. Nondefense decreased 10.0 percent, compared
with a decrease of 3.1 percent. Real state and local government consumption expenditures and gross
investment was unchanged in the fourth quarter, after increasing 1.7 percent in the third.
The change in real private inventories subtracted 0.02 percentage point from the fourth-quarter
change in real GDP, after adding 1.67 percentage points to the third-quarter change. Private businesses
increased inventories $111.7 billion in the fourth quarter, following increases of $115.7 billion in the
third quarter and $56.6 billion in the second.
Real final sales of domestic product -- GDP less change in private inventories -- increased 2.7
percent in the fourth quarter, compared with an increase of 2.5 percent in the third.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 1.6 percent in the fourth quarter, compared with an increase of 3.9 percent in the
third.
Gross national product
Real gross national product -- the goods and services produced by the labor and property
supplied by U.S. residents -- increased 3.1 percent in the fourth quarter, compared with an increase of
4.4 percent in the third. GNP includes, and GDP excludes, net receipts of income from the rest of the
world, which increased $17.0 billion in the fourth quarter, compared with an increase of $12.7 billion in
the third; in the fourth quarter, receipts increased $26.7 billion, and payments increased $9.7 billion.
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
4.2 percent, or $176.7 billion, in the fourth quarter to a level of $17,089.6 billion. In the third quarter,
current-dollar GDP increased 6.2 percent, or $251.9 billion.
Gross domestic income
Real gross domestic income (GDI), which measures the output of the economy as the costs
incurred and the incomes earned in the production of GDP, increased 2.7 percent in the fourth quarter,
compared with an increase of 1.8 percent in the third. For a given quarter, the estimates of GDP and
GDI may differ for a variety of reasons, including the incorporation of largely independent source data.
However, over longer time spans, the estimates of GDP and GDI tend to follow similar patterns of
change.
Revisions
The upward revision to the percent change in real GDP primarily reflected an upward revision to
personal consumption expenditures that was partly offset by downward revisions to nonresidential fixed
investment and to private inventory investment.
Advance Estimate Second Estimate Third Estimate
(Percent change from preceding quarter)
Real GDP............................... 3.2 2.4 2.6
Current-dollar GDP..................... 4.6 4.0 4.2
Real GDI............................... --- --- 2.7
Gross domestic purchases price index... 1.2 1.5 1.5
2013 GDP
Real GDP increased 1.9 percent in 2013 (that is, from the 2012 annual level to the 2013 annual
level), compared with an increase of 2.8 percent in 2012.
The increase in real GDP in 2013 primarily reflected positive contributions from personal
consumption expenditures (PCE), exports, residential fixed investment, nonresidential fixed investment,
and private inventory investment that were partly offset by a negative contribution from federal
government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP growth in 2013 primarily reflected a deceleration in nonresidential
fixed investment, a larger decrease in federal government spending, and decelerations in PCE and in
exports that were partly offset by a deceleration in imports and a smaller decrease in state and local
government spending.
The price index for gross domestic purchases increased 1.2 percent in 2013, compared with an
increase of 1.7 percent in 2012.
Current-dollar GDP increased 3.4 percent, or $555.1 billion, in 2013 to a level of $16,799.7
billion, compared with an increase of 4.6 percent, or $710.8 billion, in 2012.
During 2013 (that is, measured from the fourth quarter of 2012 to the fourth quarter of 2013),
real GDP increased 2.6 percent. Real GDP increased 2.0 percent during 2012. The price index for gross
domestic purchases increased 1.2 percent during 2013, compared with an increase of 1.5 percent during
2012.
Corporate Profits
Profits from current production (corporate profits with inventory valuation adjustment (IVA) and
capital consumption adjustment (CCAdj)) increased $47.1 billion in the fourth quarter, compared with
an increase of $39.2 billion in the third. Taxes on corporate income increased $13.3 billion, in contrast
to a decrease of $0.4 billion. Profits after tax with IVA and CCAdj increased $33.8 billion, compared
with an increase of $39.5 billion.
Dividends increased $90.5 billion in the fourth quarter, in contrast to a decrease of $179.0 billion
in the third. Undistributed profits decreased $56.7 billion, in contrast to an increase of $218.6 billion.
Net cash flow with IVA -- the internal funds available to corporations for investment -- decreased $43.0
billion, in contrast to an increase of $231.1 billion.
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BOX
Profits from current production reflect the depreciation of fixed assets valued at current cost using
consistent depreciation profiles. These profiles are based on used-asset prices and do not depend on the
depreciation-accounting practices used for federal income tax returns. The IVA and CCAdj are
adjustments that convert inventory withdrawals and depreciation of fixed assets reported on a tax-return,
historical-cost basis to the current-cost economic measures used in the national income and product
accounts.
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Corporate profits by industry
Domestic profits of financial corporations increased $6.1 billion in the fourth quarter, compared
with an increase of $9.7 billion in the third. Domestic profits of nonfinancial corporations increased
$18.1 billion, compared with an increase of $12.7 billion.
According to the measure of profits before tax with inventory valuation adjustment, the increase
in profits of financial corporations reflected an increase in Federal Reserve banks that was partly offset
by a decrease in “other” financial industries. The increase in profits of nonfinancial corporations
primarily reflected an increase in manufacturing that was partly offset by decreases in utilities and in
“other” nonfinancial industries. Within manufacturing, the largest increase was in petroleum and coal
products.
The rest-of-the-world component of profits increased $22.9 billion in the fourth quarter,
compared with an increase of $16.7 billion in the third. This measure is calculated as the difference
between receipts from rest of the world and payments to rest of the world.
Gross value added of nonfinancial domestic corporate business
In the fourth quarter, real gross value added of nonfinancial corporations increased, and profits
per unit of real value added was unchanged, reflecting an increase in unit prices and a decrease in unit
labor costs that were offset by an increase in unit nonlabor costs.
2013 Corporate Profits
Profits from current production increased $92.6 billion in 2013, compared with an increase of
$131.8 billion in 2012. Domestic profits increased $95.5 billion, compared with an increase of $149.3
billion. Domestic profits of financial corporations increased, and domestic profits of nonfinancial
corporations increased.
According to the measure of profits before tax with inventory valuation adjustment, the increase
in nonfinancial corporations primarily reflected increases in wholesale trade, in information, and in retail
trade that were partly offset by a decrease in manufacturing. Within manufacturing, the largest decrease
was in petroleum and coal products. The rest-of-the-world component of profits decreased $2.9 billion,
compared with a decrease of $17.7 billion.
Taxes on corporate income decreased $15.9 billion in 2013, in contrast to an increase of $60.6
billion in 2012. Profits after tax with inventory valuation and capital consumption adjustments
increased $108.5 billion, compared with an increase of $71.2 billion. Dividends increased $131.7
billion, compared with an increase of $68.7 billion. Current-production undistributed profits decreased
$23.1 billion, in contrast to an increase of $2.4 billion.
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BEA's national, international, regional, and industry estimates; the Survey of Current Business;
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* * *
Next release -- April 30, 2014 at 8:30 A.M. EDT for:
Gross Domestic Product: First Quarter 2014 (Advance Estimate)